Fueling Your Performance through Purpose
Mark Zuckerberg stumbled onto his company’s purpose early in life. As a young boy, he created a system similar to an instant messenger system to communicate with his family. His father was a dentist and ran his business at home. Part of the house was the business, and the other part was the residence. The communication system let family members touch base throughout the day.
He had the same desire to connect with his classmates who lived in the next town, across the bridge. He wasn’t yet able to drive, and they were too far away to spend time with after school, so they used AOL Instant Messenger to communicate. Not being able to spend time together was foundational in forming his views about connecting and communities.
The early version of Facebook was developed while Zuckerberg was at Harvard. He wanted to create a platform for his classmates to connect. It caught on so quickly that he rolled it out to one university after another. Upon taking a leave from Harvard to scale his business, it became clear that he was on to something. So, he left Harvard and looked forward to growing what is now one of the world’s most valuable companies.
Zuckerberg was clear about Facebook’s purpose—to connect people. As he continued to look at why people wanted to connect and what resonated with them, he recognized that people wanted to be part of a community. He revised Facebook’s purpose to reflect people’s desire to build communities. The purpose-driven focus of the business has been so powerful that Facebook topped two billion monthly users by mid-2017.
Facebook was founded in 2004. In the space of 13 years, it was able to go from nothing to connecting a little more than 25 percent of the world’s population. That is the power of purpose.
Like Zuckerberg, Blake Mycoskie, founder of TOMS, had a clear purpose. Only it took him a bit longer to find it.
Mycoskie found his inspiration while on vacation in Argentina. Kids couldn’t go to school because shoes were required and many didn’t have them. Those who did have shoes were wearing the same type of shoe: a plain, utilitarian slip-on made with canvas.
What if he could start a business that supported the local economy while introducing the “one for one” concept into business? For each shoe purchased, one would be given away to a child in need (one for one). He extended his stay in Argentina to get contracts with local shoemakers to launch his business.
When he returned to California, his sister served as a sounding board for his new business. It quickly became clear that the purpose of the company was about one for one. His original marketing focused on the price point and utility. Helping kids get shoes was not in the original marketing. He connected the purpose with the customer through marketing by introducing the “one for one” concept, and that is when the message started resonating. Tomorrow’s Shoes was born. With a name too long to fit on a shoe, it was shortened to TOMS.
The message resonated so clearly with his target audience that the company grew rapidly from its 2006 start. Over the course of a decade, they gave away more than 70 million shoes. The company’s revenues were estimated to be $500 million in 2016. Mycoskie sold half of the company to Bain Capital in 2014, with an estimated valuation of $625 million.
What started out as a purpose-driven company became a profitable business. As it scaled, the cost of producing the shoes rapidly declined, allowing the company to serve a social purpose while being profitable. In addition to providing shoes, it has also funded cataract surgeries—to give people their vision—and provided safe drinking water. TOMS became so successful, it spawned an entire industry of one for one–focused products and companies.
Zuckerberg and Mycoskie were both able to identify a need in the market and build a business that centered around purpose. It was the clarity of that purpose that resonated with customers and allowed the businesses to scale rapidly.
People want to be part of a community. They want to be associated with your business, because of how they feel when they interact with it, not because of facts and data. Facebook’s and TOMS’ journey highlights the five performance accelerators I’ve identified as key. Each of these concepts will help you clarify what you are about.
Pozzo Performance Accelerators:
- Your purpose needs to be clear and unambiguous.
- Your purpose should be at the center of everything you do.
- Your purpose needs to resonate with customers.
- Your employees should share a passion for your purpose.
- Your profit and purpose don’t need to be at odds.
In this chapter, we’ll build out each of the five concepts and provide some helpful tools to introduce these concepts into your organization or refine your thinking if you already have a good start. This chapter is focused on the purpose of your business. As such, when we discuss your purpose, you should be thinking in the context of your business.
Performance Accelerator 1: Your Purpose Needs to Be Clear and Unambiguous
Knowing the purpose of your company seems easy and obvious. And for some, it is. They just know in their bones what the business is about, and it shows in all the actions they take. They can tell you in one sentence what the business is about, and you get it. Clarity.
For others, it takes a while to figure out the purpose. The conversation may be long and rambling—a sign that clarity does not yet exist. Whether finding it easily or over time, clarity is essential. Your purpose needs to be clear and unambiguous because it influences the customers you attract, the people who want to be part of your company, and the way work happens every day.
Many founders are clear about the purpose of their businesses when they start. It is what attracts others to the business. It is compelling; yet, as people change and the years go by, the purpose can become diluted. That is why it is important to periodically check in on whether the purpose of your business is still clear and compelling.
You will get instant feedback about the clarity of your purpose and how well it is resonating with others. By sharing your purpose, you are explicitly telling people what to expect when doing business with your organization. And by doing so, you will learn whether people understand your purpose.
Clearly, there is a benefit to knowing your purpose. So, how do you find yours? There are five steps that can help you find your purpose. They involve writing down what is important, seeking internal and external feedback, understanding your capabilities, and knowing where you stack up against competitors.
As you read through this section, use the guide in Table 2.1 to gain clarity on your purpose.
Table 2.1 Finding or renewing your purpose
| What is it about your business that is important and meaningful? |
| Why is it important? |
| Why do your customers and investors do business with you? |
| Why do your suppliers or partners do business with you? |
| What do you do well (your capabilities)? |
| What sets you apart from your competitors? |
Wendy Collie understands the importance of being clear and unambiguous about purpose.
When describing the importance of clearly stating the purpose of a business, she stresses that it isn’t just necessary to clearly state what the purpose is; it must also be intentional, vividly described, and shared broadly across the organization. If any of these aspects are missing, people will fill in their own gaps.
Her litmus test at New Seasons was to talk to people at all levels and hear what they knew about the company and its purpose, why the business existed, and so on. If the individuals didn’t understand, the communication by leadership wasn’t successful.
With the purpose in mind, New Seasons started their communication and common purpose work on day one of orientation. The history, purpose, mission of the company, and values were shared during orientation to entrench people up front. A lot of storytelling occurred, which helps bring the company to life by creating emotional attachments and excitement. Then everything else was taught.
Wherever you are in the organization, by understanding the purpose and bringing it to life, you can have an impact. If the purpose isn’t clear to you, it isn’t clear to others. Many of the following steps are within your reach.
Write Down What Is Important and Why
Nothing brings more focus than writing something down. You may start with a blank sheet of paper and struggle to get words on the paper. Or maybe the words come easily, and the paper fills rapidly. Either way, getting the words on paper makes them real and creates a focus that just talking or thinking doesn’t do.
The words that describe your purpose should ultimately be clear and concise. Can they be boiled down to one or two sentences? If your purpose is longer than that, the possibility of a misunderstanding becomes higher. People start to tune out or become confused.
Indicating why your purpose is important can bring additional clarity. In many cases, the purpose may be obvious. In other cases, it may not. By writing down why your organization is in business, revisions to the purpose may be necessary to ensure the intention of the why is reflected in the purpose itself.
As one of the largest employers in the community, Longview’s fate had a significant impact on the community. At the time I joined the business in 2007, it was not operating well, and many in the community feared it would be shut down. Creating a long-term, sustainable business was important to the future of the community. That perspective was written down and displayed throughout the company.
Ask Key Stakeholders Who Pay You
The most insightful perspectives about your business may come from people who do business with you.
From a customer perspective, you will hear what your business does well and why customers keep coming back. Equally important is hearing from former customers or those you would like to do business with but don’t. Their perspectives may tell you if there is a gap between what you believe you are delivering and what others believe you are delivering. It will tell you if you are living up to your purpose.
Why do your customers buy from you and not your competitors? Price is sometimes the answer, but not always. Your customers buy from you for some set of reasons. Maybe you are easy to do business with. Maybe your purpose is aligned with theirs. The reason for their purchases is typically deliberate.
For example, when I was at Longview, we reached out to customers to understand why they bought from us. For some, it was about the quality of the product and timeliness of delivery. And for others, it was about the relationship and the quality—the close working relationship that resulted in products that were fit for purpose and worked well for both parties.
Similarly, your investors put money into your company for a specific reason. Some may want a specific return. Others may be interested in activities your company is engaged in. For others, it may be about the purpose of your company. Understanding why they are investing in you and ensuring that you are on the same page is important.
Each of these perspectives will give you insight about why people and organizations spend money with you. Whether that perspective is how you perceive your purpose or not will serve to either refine what your purpose is or provide feedback on the need to change how you operate to align perception with your intended purpose.
Ask Key Stakeholders Who You Pay
At times, experiences can be significantly different for those who are on the receiving end of the dollar. High-performing organizations do not typically distinguish treatment of people and companies on the basis of the dollar flow. This area is one that will tell you how well your purpose and values are showing up every day.
People who work in your organization have a unique perspective. They may or may not understand what you are trying to accomplish, your purpose. Formal methods of feedback include engagement surveys. Informal methods can include walking around and having conversations. Unless you have a high degree of trust, it is unlikely you will get a full perspective through informal methods. And you really need your people’s perspective. Beyond how well they understand your purpose, you also want to know if you are living it. If that trust isn’t there today, you’ll need a neutral third party to have these conversations and begin building trust.
Your suppliers are also a wealth of information on what you do well. Your interactions and how easy or hard it is for your suppliers to do business with you will say a lot about your purpose. Every interaction is an opportunity to display your purpose and values. Do you partner and work collaboratively with your suppliers, or do you treat them poorly? If you do this well, you’ll find they will provide you with connections to new business as well.
Throughout my career, the one theme that has been consistent is customers value when you understand their businesses and deliver a product or service they value. At Ernst & Young, for example, clients valued audit teams that understood their business and targeted the audit appropriately. What do your customers value? How can you deliver based on what they value?
The perspective of those you pay is typically very insightful. Their insights may be delightful and something not previously considered—or may be a different take on what you do well and why you exist. You may get a very different perspective from the people and organizations you pay—maybe even one that is not good. In any case, this feedback will help shape your purpose and next steps.
Outline Your Capabilities and Their Impact
Part of defining your purpose is knowing what your organization does well—its capabilities. Maybe you can produce a product faster than anyone out there. Or you have outstanding customer service. List all the capabilities of your organization that set it apart or are critical to its operations and confirm that they are indeed the key capabilities.
Your organization’s capabilities should naturally fit with the intended purpose. For example, let’s say your business makes seatbelts. Seatbelts save lives (your purpose). If your capabilities include creating no defects/high quality and having the ability to meet customer demand, your capabilities support your purpose. But if you have high defects/failure rate in accidents and you can’t satisfy customer demand, your capabilities may not be supporting your purpose (saving lives).
If your capabilities and purpose are not quite aligned, it is time to figure out which needs adjusting—the purpose or the capabilities.
Describe What Sets You Apart from Your Competitors
You do things well in your business. So do your competitors. Do you know what you do well and how that stacks up against what your competitors do? Getting an internal perspective from people within your business about what your business does well and its shortcomings versus the strengths and weaknesses of each competitor is important. Having an external perspective from people outside your business on how you and your competitors stack up is critical.
External perspectives are available from many sources. Industry publications showing financial performance may be available by submitting data on your business or paying a fee. Depending on how sensitive the information is, you may get a customized report that shows your information specifically and that of the rest of the industry combined. Banks, auditors, insurance companies, and consultants also have perspectives and varying levels of industry analysis on the basis of what they see in doing business with others. The information you receive from these sources may be informal to formal, with confidentiality considered.
At Longview, we had access to certain raw materials (wood chips from slow growing trees) that were not available in other places around the United States, or the world. Combined with equipment in the facility, we could make products that only one or two others in the world could make. Re-creating the combination of the two was cost prohibitive, creating a natural barrier in certain areas.
Linfield College has a similar advantage, situated in the heart of the Willamette Valley. President Tom Hellie was able to leverage this distinguishing factor in its wine program, as the only college in the United States with a program focused on the soft skills necessary to run a successful winery. The degree was a minor and recently became a major.
Linfield’s nursing program is the oldest in the state of Oregon—and unusual in that it emphasizes a very rich and interdisciplinary liberal arts set of requirements. As a result, the students have strong communication skills and the ability to think on their feet, resulting in many becoming head nurses.
Understanding what sets you apart from your competitors ultimately gets to purpose. The reason why customers buy from you versus your competitors should be a reflection of your purpose.
Performance Accelerator 2: Your Purpose Should Be at the Center of Everything You Do
One way to think about the purpose being at the center of your business is to think about it in terms of the solar system as depicted in Figure 2.1. Your purpose would be like the sun; its gravitational pull keeps all of your stakeholders in your orbit. The light and warmth cause all in your solar system to grow and flourish.
Figure 2.1 Your purposeful solar system
The purpose of an organization should be stable and rarely change. The tactics may change frequently. It is critical for leaders to be consistent in how they discuss the purpose of the organization internally and externally. Whether it is about building communities or providing solutions that make everyday life easier, pick your favorite purpose, and that purpose should be front and center of everything. The actions being taken by the organization should support the purpose and be easy to understand.
By being clear and consistent about your organization’s purpose, every person in the organization should know how his or her actions impact the larger organization and purpose. And if they don’t know, asking for clarification is not only acceptable, it is expected.
In a purpose-driven organization, the purpose should be discussed on a regular, if not daily, basis. Conversations should happen as part of sales meetings, business reviews, employee communications, and so on. How the purpose is discussed should be consistent each time it is discussed. By discussing the purpose frequently, the message will be reinforced—as long as it is consistent.
People look to leadership to confirm whether the organization is really about what it says it is about. People will look to leadership for clues in words and actions of the real purpose. If actions are consistent with words, the authenticity of the purpose and trust in the organization are reinforced. Consistency in communication and actions builds trust.
But it isn’t just about leaders. People at all levels of the organization should act consistently with the purpose of the organization. Customers expect the experience that was promised by the organization through its purpose. At the end of the day, engaged employees tend to deliver on the stated purpose of the organization. They walk the talk.
Sharing your purpose doesn’t need to be complicated. It can be done through talks with local business or industry groups, conversations one-on-one, marketing materials, your website, articles in the newspaper, and so on. However you choose to tell everyone, your purpose should be consistent.
By sharing the purpose of your organization broadly, you’ll find that a natural attraction is beginning to develop. Customers who share your sense of purpose become attracted to you. So do employees. It tells stakeholders what kind of experience to expect from you. It sets the foundation for everything you do.
Performance Accelerator 3: Your Purpose Needs to Resonate with Customers
Your purpose signals to customers what you are about and how you will engage with them, attracting the right customers to you. Some customers will buy on price, but as soon as a lower price pops up somewhere else, they will move away from you just as fast as they came to you. From a long-term perspective, this is not the right customer with whom to build a business that outperforms.
Just as with Facebook and TOMS, meeting the needs of your customers in a way that really resonates will attract customers quickly and cause them to stay. You are not just meeting a need but doing it in a way that connects your business with theirs. You are offering something that is distinct from those of your competitors.
In being clear about your purpose and sticking to it, you also indicate to customers what you will do and what you won’t do. For example, CVS stopped selling cigarettes and tobacco products in 2014, prompted by its purpose to focus on the health of its customers. While it lost $2 billion in annual sales, it felt it was the right thing to do. By making this decision, it was able to focus more on other pharmacy and medical services that made up for the loss in tobacco.
At Linfield, students value the 11:1 student-to-faculty ratio. The small size of the college allows for close relationships that are transformative to the students. The faculty has the ability to mentor and inspire the students, and the students recognize it.
You will always hear commentary from people who do not buy into your purpose. It is important to ignore that commentary. Don’t try to serve everyone. Listen only to your customers or former customers to check that you aren’t drifting off your purpose.
Performance Accelerator 4: Your Employees Should Share a Passion for Your Purpose
Companies are looking for more from their people than just the technical skills necessary to complete a job. They are increasingly focused on hiring for fit. They are looking for alignment between the values of the person and the values of the company. This requires the individual to clearly understand what is important to them. It also requires the company to know what it stands for.
Finding the source of passion in your people and making sure it aligns with the purpose of your company is critical. If employees really believe in what they are doing, it shows up as discretionary effort—that intangible that causes people to pay a little more attention and put a little more effort or passion into what they are doing. And it shows. Quality is typically higher, the customer experience is better, and employee engagement is higher.
Performance Accelerator 5: Your Profit and Purpose Don’t Need to Be at Odds
People want to work for companies that are about more than just making money. They want to have a positive impact on their customers and their communities. They want to make a difference. By focusing on purpose, people become more engaged. While this is true for everyone, it is especially important for the generations that are entering the workforce today.
Deloitte found that businesses that focus on purpose rather than profits tended to have higher anticipated growth potential and attract more capital as outlined in its research “Culture of Purpose—Building Business Confidence; Driving Growth 2014 Core Beliefs & Culture Survey.”
In a 2012 study titled, “How Employee Engagement Drives Growth,” Gallup found organizations with high employee engagement had 21 percent higher productivity and 22 percent higher profits than companies with actively disengaged employees. According to Jim Harter of Gallup, “Engaged workers . . . have bought into what the organization is about and are trying to make a difference. This is why they’re usually the most productive workers.”
Businesses don’t attract and retain the best people through money. While money is a factor in deciding where to work, it is only a hurdle. In other words, if you aren’t offering enough to make the job interesting, people won’t consider it. But if you are, it is only a starting point, after which many other factors come into play. Again, people want to make a difference, so the job must be one with a purpose that is about more than just making money.
Given the importance of purpose in engaging employees and helping a business to thrive, you need to outline the purpose of the organization—simply, clearly, and in a way that creates an emotional connection. Purpose is about more than statistics and discrete goals. It is the way you feel when you know things are better off because you were involved. And when the people within the company are excited and engaged internally, it will reflect well in all their external interactions.
Your Actions
Your purpose is the guiding light for your organization. There is a direct correlation between having a purpose, having engaged people in the organization, and delivering the expected results. Focusing on a purpose is subtly different from focusing on an outcome. By focusing on doing the right thing based on the purpose, people are bought in. They want to make a difference. And the by-product or outcome is delivering the expected experience—with higher productivity and earnings.
As you reflect on this chapter, consider how strongly your purpose is resonating with people. No matter where you are in your organization, you can have an impact. If your purpose is clear, living your company’s purpose will reinforce it with everyone you interact with. If it is not, engaging with senior leadership and asking questions can highlight a gap or clarify your understanding. Either way, if you aren’t clear, others probably aren’t either. The following are actions and questions necessary to ensure your purpose is clear and unambiguous:
- Complete the guide to finding or renewing your purpose.
- Talk to the people in your solar system and get their perspective on your purpose. Is it what you expected?
- Are your capabilities aligned with your purpose?
- What other gaps do you need to close after reading this chapter, and what resources do you need to close them?